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The Bloomfield Hills, Michigan-based senior living owner and operator has sold a portfolio of properties to ReNew REIT and is forging ahead with an expansion plan that includes development and acquisitions with a variety of partners — including at least one project with a new investor in the senior housing industry.

The company has about 60 senior housing properties in the Midwest, Florida and the Northeast, and historically has owned nearly all of them, in conjunction with its affiliated commercial real estate investment and development company REDICO. At the end of 2018, the company agreed to sell a portion of its Michigan portfolio to ReNew REIT for $243.4 million. ReNew, based in Toledo, Ohio, was started last year by George Chapman, former CEO of Health Care REIT, now known as Welltower (NYSE: WELL).

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American House or REDICO may retain a small ownership stake in the portfolio, which is mostly independent living and encompasses 1,760 units, according to Senior Care Investor, which first reported on the transaction.

ReNew REIT declined to comment for this article, as did commercial real estate broker Holliday Fenoglio Fowler, which worked on the transaction.

The risks to new development in the senior housing industry are well-documented, and include ramped-up competition and the rising cost of construction, all of which factor in to American House’s development plans, Watchowski said. But that doesn’t mean the company isn’t growing — it is, most evidenced by the fact that American House had just 13 communities one decade ago.

“Our thought is to now grow into potentially the North, through some of the eastern seaboard states,” Watchowski said. “Potentially we would be moving up into Alabama and Georgia, maybe South Carolina.”

One recent deal that exemplifies that growth strategy is a $28 million acquisition of Bentley Commons at Keene, a 109-unit independent and assisted living community in Keene, New Hampshire, which will be renamed American House Keene.

Big fish

For that transaction, American House linked up with Black Salmon, a Miami-based real estate investment firm that had, until this deal, focused exclusively on office, industrial and hospitality assets. American House was the general partner for this deal, while Black Salmon acted as limited partner.

The Keene acquisition may only be the beginning for Black Salmon, which has $250 million of investments planned in the senior housing space over the next year. Overall, Black Salmon has about $600 million in its total asset portfolio and pipeline.

The firm recently linked up with REDICO to acquire the Bank of Montreal Plaza in Indianapolis for $70 million, and it was through that acquisition that the two companies discussed plans to collaborate on senior housing properties, according to Jorge Escobar, CEO and Managing Partner of Black Salmon.

“We were looking for opportunities in five major markets: New Hampshire, Florida, Arizona, California, Washington state,” Escobar told SHN. “The first one that came and matched all the investment parameters ended up in New Hampshire.”

In addition to Escobar, Black Salmon is also headed up by partners Camilo Lopez; Diego Madotta, a former commercial vice president of Capital Markets Argentina; and Eduardo Escayol, who is a senior partner of Capital Markets Argentina.

Unlike American House, Black Salmon plans to grow only through acquisitions, and doesn’t have a senior housing management arm. The company has targeted six other potential deals in addition to the one inked in New Hampshire. For the time being, the company will focus on stable independent living, assisted living and memory care communities.

“We are currently working very hard and very fast in order to deploy that equity,” Escobar said. “I think office and senior housing are the top two sectors we should be focused on in the next 12 to 24 months.”

And there may be more collaborations with American House or REDICO in the cards for Black Salmon.

“We will continue to invest with Black Salmon, and we’re certainly looking at other deals with them on the commercial side on the business,” Watchowski said.

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